Interest Income Withholding for US Non Residents

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Subject Author Date Interest Income Withholding for US Non Residents W 06-06-2009  Re: Interest Income Withholding for US Non Residen... Alan 06-06-2009
Posted by W on June 6, 2009, 2:02 pm Please log in for more thread options An earlier post here suggested a person residing less than 183 days per year in the U.S., who makes interest income, would have either 0% or 30% withholding, depending on the type of interest income. I wanted to get examples of each type of interest withholding. The original post here stated that one should read Code § 871(a) for the general rule that U.S. source interest income paid to non-U.S. persons is subject to a 30% tax. There are exceptions in Code 871(h) and (i) for bank interest and portfolio interest, among others. The exception for bank interest is clear. Would this include money market interest as well? It's not clear what is Portfolio interest. Would this include interest from bond investments? What are some other examples of interest income that would get the 0% withholding rate? And what are some examples of interest income that would get the automatic 30% withholding? If there is a good summary list of types of incomes for laymen readers someplace, I would appreciate the reference. -- W -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Alan on June 6, 2009, 3:05 pm Please log in for more thread options W wrote: > An earlier post here suggested a person residing less than 183 days per year > in the U.S., who makes interest income, would have either 0% or 30% > withholding, depending on the type of interest income. I wanted to get > examples of each type of interest withholding. > > The original post here stated that one should read Code § 871(a) for the > general rule that U.S. source interest income paid to non-U.S. persons is > subject to a 30% tax. There are exceptions in Code 871(h) and (i) for bank > interest and portfolio interest, among others. > > The exception for bank interest is clear. Would this include money market > interest as well? > > It's not clear what is Portfolio interest. Would this include interest > from bond investments? > > What are some other examples of interest income that would get the 0% > withholding rate? > > And what are some examples of interest income that would get the automatic > 30% withholding? > > If there is a good summary list of types of incomes for laymen readers > someplace, I would appreciate the reference. > General Info: http://www.irs.gov/businesses/small/international/article/0,,id=105154,00.html Interest Details: http://www.irs.gov/businesses/small/international/article/0,,id=106355,00.html Also note that there are at least two kinds of money market interest. Interest from MMAs (Money Market Accounts) and interest (reported as dividends) from MMMFs (Money Market Mutual Funds). The former is bank interest; the latter is portfolio interest. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Schedule K-1 Income for Non US Residents June 6, 2009, 8:48 pm Taxing Non Residents for Foreign Sourced Income October 26, 2009, 3:40 am Use Tax for Non residents January 2, 2007, 4:27 am Tax Table for non-residents? August 17, 2007, 12:08 am Virginia's Special MFS Requirement for Non-Residents February 4, 2008, 4:28 pm stimulus check for non-residents filing May 18, 2008, 10:26 pm Exception to FICA: Medical Residents September 27, 2008, 12:01 pm Taxation of Vanguard Int'l funds for non-residents January 29, 2007, 2:30 am Interest Income May 31, 2007, 12:58 am Re: NORTH CAROLINA FILING STATUS REQURIEMENT FOR NON-RESIDENTS CHANGED October 21, 2006, 6:33 pm